Friday, November 21, 2003

Money cannot buy happiness. Thoughts on wealth + well-being...

Yesterday Earth-Info.Net attended a series of fascinating talks on the relationship between wealth + well being that had been organised by the Green College Centrefor Environmental Policy + Understanding.

Many, excellent points were made about the uncertain + unreliable relationship between wealth and happiness.

There is therefore a pressing need to develop new ways of measuring wealth + well-being and to ask challenging questions of ourselves if we want our societies + economies to be efficient, just + sustainable.

The first speaker, Prof Norman Myers, spoke of the danger of relying on the GNP as an accurate + complete measure of national wealth.

This is because black + grey economies may be very large, but concealed, as in the case of Russia where the as much as 50% of the economy is underground, and because an indicator as crude as GNP sums together socially, environmentally + economically destructive measures with those that are beneficial.

Prof. Myers suggested that we should instead adopt alternative indicators which gives a more holistic assessment of wealth + well-being, such as the Genuine Progress Indicator or various indices of sustainability which aim to reduce waste per capita, etc.

Although economists acknowledge that the GDP is a measure of output, not welfare such qualifiers are rarely used by politicians + the media. This leads to the lazy, but widespread, assumption that a larger GDP is always good for everyone + everything.

The second speaker was Sir Richard Jolly a former Special Adviser to the Administrator of UNDP + the architect of the UN's Human Development Report. Sir Richard pointed out that the founders of GNP had a strong sense of their system's limitations, but felt there was value in permitting the economies of different countries to be compared... although they warned that the statistics office should not be allowed to capture decision-making.

One of the most interesting points Sir Richard made was that GNP is not God (i.e. all knowing, benevolent, etc). Instead, it represents an undemocratic conventional measure of growth. The GNP is not decided on the basis of one person, one vote but on an economy's overall output. It is therefore a highly biased measure, as was acknowledged in a 1974 report by Hollis Cheney for the World Bank "Redistribution with Growth", and should be treated as such, even if it remains important in determining employment policy, etc.

The role of Amartya Sen's Development as Freedom book in plotting an alternative course, which advocates a Human Development Index, was highlighted, with its emphasis on creating conditions that ensure people develop the capabilities + choices necessary to live long, healthy + full lives.

In his summing up, Sir Richard said that there were conceptual problems in identifying what we should try to measure and danger in attempting to over-simplify a complicated situation, in order to reach out to a public. He therefore urged those working in this field to be serious, not sloppy or romantic and to use + win over statisticians. Sir Richard also said that there is a need to be clear who will use a new index, when + how and to attack GNP for what it is, not for what it is not...

James Robertson (a founder of the New Economics Foundation) spoke on the need for fundamental reform of the world's current monetary system...

James complained that most intellectual energy + time went into measuring wealth and well-being rather than considering how to implement practical reforms that would distribute money more fairly, efficiently + sustainably.

We therefore need to reform the scoring system for economic life and to consider which activities are rewarded by the money system, with changes in perverse or inadequate taxes, public spending, how money is created and put into circulation. These conditions determine how people behave in order to make the bottom line, whereas further measurement may have a small effect on how people behave.

On a philosophical level, James suggested that consumerism trades on a desire for indindividuality, which leads to a homogenisation of consumer culture, a dull uniformity for consumers and an urge to withdraw from the market in order to find a personal identity... In its extreme such withdrawl can lead people to join cults, but on a more commonly experienced level drives people to create an authentic self which involves "people writing the own biography", and creating their own identity, in a way that was not possible 30 years ago. Under these conditions the question "who am I" can be answered by building a suit of armour, a response understood and manipulated by marketers who offer ready made, aspirational identities at a price... while these conditions persist increasing consumption is unavoidable. There is therefore a need for a social readjustment so that a more authentic culture, which does rely on consumption, can be achieved.